Corruption: law enforcement vs. cultural norms

Cultures of Corruption: Evidence from Diplomatic Parking Tickets

Ray Fisman, Edward Miguel

Abstract: Corruption is believed to be a major factor impeding economic development, but the importance of legal enforcement versus cultural norms in controlling corruption is poorly understood.   To disentangle these two factors, we exploit a natural experiment, the stationing of thousands of diplomats from around the world in New York City.   Diplomatic immunity means there was essentially zero legal enforcement of diplomatic parking violations, allowing us to examine the role of cultural norms alone.   This generates a revealed preference measure of corruption based on real-world behavior for government officials all acting in the same setting.   We find tremendous persistence in corruption norms: diplomats from high corruption countries (based on existing survey-based indices) have significantly more parking violations.   In a second main result, officials from countries that survey evidence indicates have less favorable popular views of the United States commit significantly more parking violations, providing nonlaboratory evidence on the role that sentiment and affinity play in economic decision-making.

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